It’s been a rough journey for the cryptocurrency market until 2022. In November the market had dropped by 70% from its previous peak in November 2021. Just when the market was looking down after the FTX crash turned things more dire. So, will the crypto market recover in 2023?
Crypto Market Dips are Cyclical
The crypto market, especially Bitcoin has experienced its fair share of dips in the past. Each time, it has bounced back with a huge rise.
For instance, in 2013, Bitcoin reached a peak of $1,160. It then plummeted for over a year before reaching a bottom of $150. In 2017, it broke that record, and hit a new record high of $19,600. In 2018, it was trading at $3,100. In the year 2020 it struck that resistance, and reached a record peak of $68,000 in the month of November 2021. Just like that, we’ve seen another dip. But history shows us that following each dip, there’s a bull run.
Every Dip is Followed by a Long Bull Run
Similar to what we’ve witnessed previously, dips are usually followed by a prolonged bull run that finally overcomes the resistance set by the market’s previous highest price. This is evident in not just Bitcoin but also in other cryptocurrencies.
Growing Use of Crypto and Blockchain
Crypto and blockchain technology have progressed a lot in recent years. With more and more companies and industries adopting the technology, its use and acceptance is growing. From gaming to finance the use of crypto is increasing in a variety of ways. This growing demand could lead to increasing participation in the market which could increase the price.
A rise in the interest of institutions for crypto
In the last few years we’ve noticed a growing interest from institutional investors in crypto. From banks to hedge funds, many large institutions are starting to explore the potential of crypto assets. The increasing interest from institutions could provide more stability to the crypto market and lead to greater prices.
Regulations of the government
As the crypto market is maturing and mature, governments across the globe are starting to create more favorable regulations for cryptocurrency. This could help attract more investors as well as increase the mainstream adoption of crypto.
A broader range of blockchain applications
The technology that underlies many cryptocurrencies, blockchain, has a wide range of applications that go beyond just financial transactions. For example, from supply chain management and voting, many industries are beginning to look at ways they can make use of blockchain technology. This could stimulate more investment and excitement in crypto.
Advancements in technology
Blockchain and cryptocurrency technology is still in the early stages of development. As progress is made in areas such as security and scalability, potential of crypto assets will grow. This could lead to greater use and increase in prices.
Rising global economic uncertainty
In the current economic uncertainty caused through the COVID-19 pandemic, as well as other causes, more and more investors are beginning to look for safe haven assets such as bitcoin and even gold. Because the global economic climate is uncertain, this could lead to increased demand for crypto and higher prices.
Retail investors are able to earn interest
Institutional investors aren’t the only people who are interested in crypto. Retail investors, or individual investors are also beginning to get involved in the crypto market. With increasing numbers of everyday people are educated about cryptocurrency and investing in it this could result in more demand and higher prices.
Growing awareness and acceptance of crypto
As the market for crypto grows, more and more people are beginning to become aware about and understand the concept. As understanding and acceptance of crypto grows it could result in more people purchasing and holding crypto, which can increase prices.
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The Decentralized Finance (DeFi) is a rapidly growing area of the crypto market that enables finance services created on top of blockchain technology. As DeFi continues to grow and more platforms and projects become available, this could lead to increased adoption and more expensive prices for crypto.
The development of crypto payment methods
As the crypto market is growing, more and more companies are starting using crypto to be a means of payment. This could result in increased use of crypto in everyday transactions and an increase in the cost of transactions.
More investment from sovereign wealth funds
These funds are state-owned investments, are starting to show interest in cryptocurrency as a possible asset class. As more funds allocate a portion of their portfolio to crypto, it could increase demand and increased prices.
Use of crypto for cross-border payments
One of the biggest benefits of crypto is the ability to make quick and inexpensive cross-border payments. As more businesses and individuals are beginning to make use of crypto for international transactions, it could result in increased the demand for it and a rise in prices.
The number of ATMs that accept crypto is increasing.
The number of crypto ATM’s continue to grow, it will become easier for people to buy and store crypto, which will drive up demand and prices.
The development of security tokens
Security tokens, or digital assets that signify ownership in an asset like real estate or stock are rapidly expanding sector of the crypto market. Since more and more security tokens will be created and traded, this can lead to a higher demand, and thus higher costs for cryptocurrency.
A greater adoption rate by merchants
With the increasing number of retailers accept crypto as a form of payment, this will make it easier for consumers to use and hold cryptocurrency, which will increase demand and price.
So, will crypto grow in 2023? It’s only time to find out. With these things in mind, it’s possible that the crypto market will have a rebound by 2023. And for those who are in it for the long-term patience and discipline will be key.